Against the backdrop of geostrategic tensions and the war in Ukraine, President Macron announced at Eurosatory that we are “entering a war economy.” But where does the French and European defense industry stand? Here is an overview in five episodes.
Is a European defense industry credible?
By Procopius of Caesarea*
We come back to the question of “European defense industry” because it is the subject and the object of Macron’s speech. We skip over all the necessary preconditions such as European sovereignty, a European army, a sovereign strategic decision-making capacity (enacted by whom?), which are not met and which therefore empty the question of its meaning… but they are not part of the question.
We will simply examine Macron’s projects in this field and measure the results, then analyze the capabilities of this industry in relation to the needs, and then describe what is happening behind France’s back at the level of NATO.
The conclusion will be self-evident.
Two structural projects
As soon as he came to power in 2017, Macron embarked on one of his great works, one that holds the promise of a bright future (the aftermath) and that should change the world: the Franco-German defense industry axis. The axis around which a powerful ‘sovereign’ European defense industry is supposed to be organized (according to Macron in 2018). The plan was launched at the beginning of his five-year term (2017) with 2 structuring projects: the future combat aircraft (Scaf program) and ‘maritime surveillance’ (MAWS program).
State of play: Germany has abandoned both programs, which is a total (and definitive) failure for Macron.
Exhibit 1: The Scaf aircraft
The subject is so sensitive that France had publicly warned Germany against any acquisition of F35 aircraft that would be considered an anti-Scaf casus belli. Germany has placed a first order for the F35 and is preparing a massive order for 2025 (F35 MLU). We are still waiting for the promised French reaction, which was to immediately stop the Scaf program.
Recent comment from Dassault CEO M. Trappier (June 7, 2022): “For the Scaf, “2040 is already lost. We’re more on 2050. This is a way of saying that it’s dead, because who can give the slightest credence to a current forecast for 2050… given the accelerated technological evolution.
Note 1: the European aircraft of the future is unquestionably the Anglo-Italian-Nippo-Swedish Tempest, which is part of Nato interoperability with the vigilant help of the USA. The Luftwaffe is doing its utmost to ensure that Germany joins the program (likely to be announced at the end of the year).
Note 2: the author of these lines has been interested in the Scaf since its birth (2017). It was obvious from the beginning that it was a political program that was despised by the Luftwaffe client (its chief was fired by Merkel for demanding F35s – a situation parallel to that of General de Villiers in France).
The situation today is as follows (after 5 years): there is no agreement, even on the design of the demonstrator that will be used to define the future operational aircraft: we can better understand the cry of the Dassault CEO. 5 years and absolutely nothing!
Proof 2: The Poseidon 8A program
Aviation Journal, June 10, 2022: the Franco-German MAWS (Maritime Airborne Warfare System) project is definitively dead and buried, with the Poseidon 8A program becoming the Bundeswehr’s maritime patrol platform for the long term.
After a first contract for 5 aircraft in 2021 ($1.77 billion), France (Ms. Parly) said that it was to fill a hole with the old P3Cs and that MAWS was not in question…
Today, the German naval aviation authorities are ordering 7 additional aircraft – it is no longer a question of replacing the old Orion P3Cs but of considerably increasing Germany’s maritime surveillance capability. The Élysée Palace was annoyed by the news…
I will not mention the pathetic lack of the French proposal (ATL 2 renovated for the umpteenth time) with regard to operational needs (big picture, interoperability, etc.).
Reason for German decisions
The German position is as follows: the Franco-German couple does not have the resources and industrial skills to produce the armaments currently required to face the threats that are becoming more and more real (e.g. Russian S400). The subject is closed. Only in France do some people dispute the evidence by denying the technological gap that the United States has created in all fields related to security in the broad sense. This gap cannot be filled by Europe in the foreseeable future and it is only growing rapidly. The German position is demonstrated with the help of reliable criteria and verifiable facts – it is not a question of politics and therefore no debate is possible.
Partial conclusion
The great founding work of a large European defense industry carried out by Macron during his first five years in office has fallen by the wayside: it is a total failure.
Future direction: would there be a second chance dictated by the evolution of the European security situation? There is no such chance, because the upgrading of valuable European military equipment is essentially done for the benefit of the American industry, and therefore under its control. This is mechanical.
Military equipment lives for 25 to 40 years, during which time it consumes three to five times its acquisition cost. If we take the European military aeronautics industry as an example, more than 80% of the value of the market in recent years has been captured by the United States and is therefore closed for 25 to 30 years. This is an economic reality. Hence the orientation, for example, of Airbus Defense, which is asking for (and obtaining) an MRO (maintenance) activity that will be the main part of its business. If it wants to evolve, this industry is forced to seek cooperation with the American industry (of all the missiles under development in Europe, only one is not ‘US-compatible’ – it is the ASMP-A – a nuclear missile manufactured by MBDA).
As a result, the European customer base is shrinking. A revealing figure (taken over a comparable 3-year procurement period): Dassault military contracts (of which Macron is making a lot of noise, having called himself chief sales representative) represent (in declared value) less than 8% of European contracts (including the UK) for military aircraft ordered from the US.
Upgrading Germany’s military equipment
On the one hand, Germany is devoting 100 billion euros (immediate expenditure) to its re-equipment and is raising its military budget (2% of GDP) to the level demanded by Nato. Germany thus gains access (in face value) to the 3ᵉ largest military budget in the world.
Of the 100 billion, 60% is destined for American acquisitions classified as ‘urgent’ (planes, missiles, drones, helicopters, space, etc.). The German defense budget also says how much weight Germany will carry in Europe for the defense industry. Money remains the sinews of war, just as the sword remains the axis of the world (de Gaulle).
The immediate effect for the aeronautical part alone: Germany placed an order for 35 F35s, 60 CH-47F Chinook heavy-lift helicopters, 12 P8A Poseidons (not counting Patriot systems and drones). In terms of aeronautics alone, these purchases mechanically orient German industry towards long-term American cooperation, if only for so-called MRO (maintenance, overhaul and improvement) issues.
Airbus (which has asked for it) will be in charge of these issues. We recall that 10 European countries have already ordered F35s, and 4 have ordered P8A Poseidons. These two aircraft already represent more than 80% in value of all European purchases of military aircraft (note also the new requests from many countries – June 13: the Netherlands with 6 additional F35s, Greece claiming 20 F35s, etc.). We are not talking about ‘drones’, which are practically all American (MQ9 Reaper), as European industry has shown itself incapable of manufacturing (despite a lot of money) even the most basic ones (in contrast to Turkey, for example). All American equipment is of course interoperable within the Nato framework, which means that their combination makes them an immediately operational force in case of need, regardless of their geographical distribution.
Partial conclusion: massive German purchases are definitively orienting European military aeronautics towards the American fold, with Airbus Defence systematically positioning itself as a maintenance player. The French military industry is marginalized.
*Procopius of Caesarea (6ᵉ century A.D. is a Byzantine rhetorician and historian whose work is devoted to the reign of the emperor Justinian). This is of course a pseudonym. The one of a person very well informed of the technological, political and geostrategic stakes of our time.
Next article: “The reality of the European defense industry (4/5)